Hamas imposes punishing new taxes in Gaza as foreign funding dries up

Hamas is hitting residents of the Gaza Strip with higher taxes as funding from allies such as Iran and the Muslim Brotherhood has plummeted and Egypt has cut the smuggling trade from tunnels.

Businessman Hamam al-Yazjji said he is struggling to keep his import business alive as both consumers and businesses in Gaza are hit by a triple tax whammy.

Hamam al-Yazjji has found it increasingly difficult to make a living in Gaza because of multiple taxes. /AFP

“We pay three different types of tax on any imported products – to Israel, to the Palestinian Authority and to Hamas,” Yazjji said. “I used to import tens of food items from around the world, but in the last two years Hamas makes it almost impossible to make a profit because of the high taxes they impose.”

Three months ago, Hamas raised taxes on 400 imported products by 20 percent. Among the products most affected are cigarettes, which have gone up by 35 percent since March, and cars, which are 25 percent more expensive. Gazans buying a car pay over 40 percent of the purchase price in tax.

Hamas also imposed a $1,000 annual licensing fee on cafes, restaurants and hotels.

Hamas finance ministry official Youssif al-Kayali said the terror group collects $15 million a month in taxation.

Meanwhile, Israel collects taxes on imports into Gaza and the West Bank on behalf of the Palestinian Authority (PA) and transfers the money to the PA after deducting a small administrative fee.

Hamas and the PA agreed to form a unity government in 2014 but it has not yet been implemented.

Iran drastically reduced its support for Hamas in early 2012, when Hamas refused to take sides in the Syrian civil war.

The finance ministry said Hamas lost about $10 million a month after Egypt’s Islamist President Mohammed Morsi was overthrown in 2013.

Hamas lost another significant source of income when, after Morsi’s ouster, Egypt destroyed hundreds of tunnels it said were used by militants to smuggle weapons into Sinai. Hamas made millions of dollars from taxes it imposed on goods brought through the tunnels.